M/S. J. K. JUTE MIILLS CO. LTD versus THE STATE OF UTTAR PRADESH AND ANOTHER

Citation: [1962] 2 S.C.R. 1 · Decided: 17-04-1961 · Supreme Court of India · Bench: T.L. VENKATARAMA AIYYAR · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

' 
\ 
THE SUPREME COURT REPORTS 
M/S. J. K .. JUTE i\IILLS CO. LTD. 
v. 
THE STATE OF UTTAR Pl{ADESH 
AND ANOTHER 
(S. K. DAS, J. L. KAPUR, M. HIDAYATULLAH, 
J. C. SHAH and T. L. VENKATARAMA AlYAR, JJ.) 
Sales Tax-Enactment enabling Government to fix rate of tax 
by notification-Notification declared invalid by court-Enactment 
validating notification-Retrospective operation-Validity of enact-
ment-U. P. Sales Tax (Validation) Act, I958 (U. P. IS of 1958), 
s. 3-U.P. Sales Tax Act, 1948 (U.P. r5 of I948), s. 3A-Con-
stitution of India, Seventh Schedule, List II. Entry 54. 
In exercise of the power conferred by s. 3A(2) of the U.P. 
Sales Tax Act, r948, which enabled the State Government, by 
notification, to fix the rate of the tax to be levied on the sales 
of goods specified in the section not exceeding nine pies per 
rupee, the Government issued a notification dated June 8, r94S 
imposing a tax of six pies in the rupee on sales of jute. On 
March 31, r956, the Governor of Uttar Pradesh issued an Ordi-
nance, inter alia, amending s. 3A(2) of the Act, the effect of which 
was to enact one ceiling rate of one anna per rupee on the sale 
proceeds for all goods leaving it to the State to fix within the 
ceiling such rates of tax for such goods as it might determine. 
On the same date the Government issued a notification by which 
sales on jute were liable to pay sales tax at the rate of one anna 
per rupee on the sale proceeds. The Ordinance was replaced by 
U.P. Sales Tax (Amendment) Act, 1956, under which the amend-
ed section shall "be deemed to have effect on and from April l, 
1956". One of the dealers who had been assessed to sales tax in 
accordance with the notification filed an application under 
Art. 226 of the Constitution of India, calling in question its vali-
dity, and the High Court of Allahabad held that there was no 
power in the State to issue the notification under s. 3A(2) on 
M.arch 31, 1956, as that section was itself to come into force only 
on April 1, 1956. With a view to remove the defect pointed out 
in said decision, the State Legislature passed the U.P. Sales Tax 
(Amendment) Act, 1957. but this in turn having been declared 
by the Allahabad High Court not being effective in saving the 
notification, the legislature ultimately enacted ·the U.P. Sales 
Tax !Validation) Act, 1958. Section 3 of this Act provided that 
notwithstanding any Judgment of any court the notification 
dated March 31, 1956, shall be deemed to have been issued in 
exercise of the powers conferred bys. 3A of the U.P. Sales Tax 
Act, 1948, as if the said section was in force on the date on 
April r7. 
I96I 
]. l(. jute 
JYJUls Co Ltd. 
State of 
Uttar Pradesh 
2 
SUPREME COURT REPORTS 
[1962] 
which the notification was issued in the form in which it was in 
force immediately before the commencement of this Act. The 
petitioner who was carrying on business in the manufacture and 
sale of jute goods filed an application under Art. 32 of the Con-
stitution and contended that the Validation Act of r958, had 
not brought about any change in the situation on the grounds 
(I) that the words "in the form in which it was in force im-
mediately before the commencement of this Act" ins. 3 must 
be read as qualifying the word "notification" and not the word 
"section" and in that view the notification in question was sub-
ject to the same infirmity which attached to it when it was 
published on March 3r, r956, and (2) that the State Legislature 
was not competent to enact a law imposing sales tax retrospec-
tively and therefore the Validation Act was ultra vires. 
Held: (r) that on its proper construction, the words "in the 
form in which it was in force immediately before the commence-
ment of this Act" ins. 3 of the U.P. Sales Tax (Validation) Act, 
1958, qualify the word "section" and not the word "notification", 
and that on that view the impugned notification was within the 
saving clause of the Validation Act. 
H. L. M. Biri Works v. Sales Tax Officer, A.I.R. r959 Ail. 
208, approved. 
(2) that the power of a legislature to enact a law with re-
ference to a topic entrusted to it is unqualified and that in the 
exercise of such a power it will be competent for the legislature 
to enact a law which is either prospective or retrospective. 
Accordingly, the Validation Act is not ultra vires the powers of 
the legislature under entry 54 in List II of the Seventh Schedule 
to the Constitution, for the reason that it operates retros-

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